Twitter’s 25% Flash-Crash Recovers to Just an 18% Crash

The Associated Press

Twitter shares flash-crashed down 25 percent Tuesday after someone at the company appears to have accidentally leaked the company’s disastrous first quarter revenue and earnings by posting results on Twitter’s website before the close of regular stock trading. With -$7 billion in market cap instantly evaporating, Twitter had what traders call a “dead kitty bounce” to cut the loss to -$5 billion so far.

Selerity financial intelligence service claims on its website: “We are a real-time content analytics and media company that delivers actionable, event-based insight.” The company lived up to its marketing spiel by just after 3 p.m. EDT Tuesday by sending out 4 tweets that it claimed were Twitter’s first-quarter earnings, revenue and user figures.

Twitter had to issue a press release about 25 minutes later confirming Selerity’s figures. The stock’s 26 percent inter-day crash was its worst fall since going public 18 months ago at about its current price of $42.27 today.

Twitter’s analyst call two hours later started with apologies, as Twitter CEO Dick Costolo bizarrely stated, “While we exceeded our EBITDA target for the first quarter, revenue growth fell slightly short of our expectations due to lower-than-expected contribution from some of our newer direct response products.”

Costolo then acknowledged that Twitter had just acquired an online advertiser, TellApart–a company in which he personally owns a partial stake. Analysts know that the sector is fiercely competitive, with players like publicly-traded Criteo and VC backed start-ups AdRoll and SteelHouse. TellApart is the type of newer business that is not profitable.

Twitter said that average monthly active users (MAU) came in at 302 million for the quarter, in line with expectations and up 18 percent from last year. Mobile MAUs—which accounted for about 80 percent of the total—fell short of Wall Street’s estimates.

Breitbart News reported last week that Ethan Czahor, who had to resign as Chief Technical Officer of the Jeb Bush Presidential campaign over some nasty old tweets, once said about Twitter, “If you don’t want people to get mad at you for horrible stuff you said on Twitter, isn’t the best solution to avoid saying horrible stuff on Twitter?”

Chris Sacca, managing director at Lowercase Capital and an early investor in Twitter, told CNBC this afternoon, “This is a company [Twitter] that is still experimenting with parts of monetization across many different fronts. I think these are still very, very early days.”

With Twitter valued at a market capitalization of $33 billion Tuesday morning, operating such a big company that is still “experimenting with parts of monetization across many different fronts” seems to explain why it became a $27 billion company Tuesday afternoon.


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